The song was released on a 12" single containing two remixes of the title track, as well as the song Within You. An edit of "Magic Dance" was also prepared for a 7" release but it was shelved for unknown reasons. The song was produced by David Bowie and Arif Mardin, with additional production and remix by Steve Thompson and Michael Barbiero.

Unlike "Underground", no promotional music video was made for "Magic Dance".